AI and machine learning are expected to drive growth this year for Scottish tech firms, according to an annual survey by tech trade body ScotlandIS.
In 2025, 69% of companies have identified AI and ML as critical growth opportunities, a significant increase from 43% in 2023.
“This surge reflects a broader trend of companies recognising the potential of AI to enhance operational efficiency, drive innovation, and improve customer experiences,” the industry report said.
“As organisations increasingly integrate AI into their business strategies, opportunities arise in various areas, including automating repetitive tasks, optimising supply chains, and delivering personalised services to customers.”
In line with that, the demand for skills in AI and ML has also increased, with 70% of businesses anticipating a requirement for skills in this area.
Whilst generally firms have a positive outlook – with almost three quarters (73%) of digital leaders expressing optimism for the year ahead, that is down somewhat on 2024 when the figure stood at 78%.
Karen Meechan, CEO at ScotlandIS said: “There’s a lot to be excited about in the Scottish tech sector right now. For example, the UK government’s increased focus on AI, has driven huge growth for our industry in that area. This is reflected by some encouraging responses to our survey and it’s great to see a strong sense of optimism continue as we progress further into 2025.
“With the ongoing geopolitical and economic challenges, the fact we’ve seen some slight softening when compared directly with last year’s results is hardly surprising. Seeing the Scottish tech sector remain so positive, even in the middle of a very tough climate for businesses, is testament to how resilient our industry really is.”
She added: “Given what our members are telling us, it’s important we don’t forget about the bigger picture. Like a healthy ecosystem, our sector needs support in order to thrive. Over the last year, we have shared over 400 opportunities with our members to support them entering new markets, building strategic partnerships and accessing the talent essential for growth. Looking at the year ahead, we will continue to back up our members, working closely with governments and policymakers to show just how valuable our tech sector really is.”
The report breaks down some of the key sectors driving economic growth. According to the survey, the public sector accounts for the largest share of digital demand, representing 12% of all demand. Second is financial services at 9% and third is professional services on 8%.
While the majority of respondents reported a positive outlook for 2025, some smaller businesses anticipate challenges when it comes to growth, with 16% of firms indicating cash flow was substantially more difficult in 2024 – an increase from 3% in 2023.
In response to the survey results, ScotlandIS plans to form even closer ties with policymakers, industry bodies and educational providers to address these growth challenges and help businesses scale effectively.
This year’s survey is supported by Techscaler, a £42 million Scottish Government programme run by Edinburgh-headquartered CodeBase, designed for creating, developing and scaling tech startups.
Stephen Coleman, CEO and Co-Founder of CodeBase, said: “The global technology landscape is evolving at an increasingly rapid pace, with advances in AI and a shifting investment landscape creating both challenges and opportunities. As this report shows, these macro movements are being felt in Scotland. The issues are complex and multi-faceted, but Scotland has assets, talent and infrastructure which can collectively create a strong tech economy.”